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Saturday, 29 November 2014

Market sprints to life high on expectations of interest rate cut by RBI

BSE Sensex and NSE Nifty closed at record highs on Friday, buoyed by optimism that the sharp drop in crude oil prices and slower economic growth may prompt the Reserve Bank of India (RBI) to hasten interest rate cuts.

BSE Sensex surged to 28,822 in intra-day trade before closing at 28,693 points, up 255 points or 0.90%, while NSE Nifty rallied 94 points or 1.11% to end at 8,588 points, crossing the psychological level of 8,500. Total market cap of stocks listed on BSE touched Rs 100 lakh crore on Friday.

Market participants are betting on sooner than expected interest rate cut after Brent crude prices tumbled to a 4-½ year low at $72.50 a barrel as OPEC members decided against reducing output. Meanwhile, finance minister is expected to meet RBI Governor on Monday.